Markets trade in fine fettle; Sensex hits fresh all-time high

Indian equity markets traded in fine fettle with Sensex hitting fresh all-time high in late morning deals on the back of fresh buying by funds and retail investors. Meanwhile, the broader markets outperformed benchmark indices. The BSE MidCap and SmallCap indices gained up to 0.75 per cent. Support came as the Centre released Rs 17,000 crore to the States and Union Territories as the balance compensation for the goods and services tax (GST) for the period, April-June 2022. On the sectoral front, Oil & Gas, Energy, IT, Auto and TECK witnessed the maximum gains in trade, while Metal, Bankex and Healthcare remained the only losers on the BSE sectoral space.

On the global front, Asian markets were trading in red as traders reacted the growing unrest in China amid the zero-COVID policy with record-high domestic daily Covid-19 cases and the unprecedented COVID restrictions in several cities in China. Back home, in stock specific development, Indian Energy Exchange (IEX) dipped after the company announced its board's approval for a share buyback proposal.

The BSE Sensex is currently trading at 62517.35, up by 223.71 points or 0.36% after trading in a range of 61959.74 and 62528.38. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.67%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.83%, Energy up by 1.71%, IT up by 0.86%, Auto up by 0.83% and TECK up by 0.61%, while Metal down by 1.55%, Bankex down by 0.12% and Healthcare down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.68%, Asian Paints up by 1.38%, Wipro up by 1.20%, Bajaj Finserv up by 1.17% and Infosys up by 1.07%. On the flip side, HDFC down by 1.32%, HDFC Bank down by 1.25%, Tata Steel down by 1.22%, SBI down by 0.67% and Bharti Airtel down by 0.54% were the top losers.

Meanwhile,  Care Ratings in its latest report has said that the cumulative recovery rate under the insolvency resolution processes of debt-ridden companies declined to 30.18 per cent at the end of the September quarter (Q2FY23), indicating that lenders took more haircut on their exposure. The recovery rate has fallen steeply from a peak of 43 per cent in Q1 FY20.

As per an analysis of Insolvency and Bankruptcy Board of India (IBBI) data done by Care Ratings, of the Rs 7,90,626.2 crore claims from the financial creditors admitted by various benches of the National Company Law Tribunal (NCLT), only Rs 2,43,452.5 crore or 30.18 per cent have been recovered till the end of Q2 FY23. The overall recovery rate implies a haircut of around 70 per cent for the lenders. It stated that the cumulative recovery rate has been on a downtrend, falling from 43 per cent in Q1 FY20 and 32.9 per cent in Q4 FY22 as larger resolutions have already been executed and a significant number of liquidated cases were either Board for Industrial and Financial Reconstruction (BIFR) cases and/or defunct with high resolution time. There has also been a fall in the number of cases going to/admitted by the NCLT since H2 FY21.

The report further said since the implementation of the IBC in 2016, close to 5,893 companies have been admitted by various NCLT benches. Out of those cases, operational creditors filed 3,008 cases, a little over 50 per cent, and financial creditors filed 2,531 cases or around 45 per cent. The share of corporate debtors has continued to remain the lowest at around 3 per cent as of September 2022. The share of the various sectors has largely remained constant compared with the previous period, with the manufacturing sector accounting for the highest at 39 per cent of the overall cases, followed by real estate (21 per cent), construction (11 per cent) and trading (10 per cent).

The CNX Nifty is currently trading at 18561.45, up by 48.70 points or 0.26% after trading in a range of 18365.60 and 18568.15. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.45%, Reliance Industries up by 2.73%, Hero MotoCorp up by 2.25%, Asian Paints up by 1.38% and Bajaj Auto up by 1.30%. On the flip side, Hindalco down by 2.17%, JSW Steel down by 1.98%, Apollo Hospital down by 1.69%, Tata Steel down by 1.41% and HDFC down by 1.38% were the top losers.

All Asian markets were trading lower; Nikkei 225 slipped 148.31 points or 0.52% to 28,134.72, Taiwan Weighted dropped 221.64 points or 1.5% to 14,556.87, Straits Times trembled 16.37 points or 0.5% to 3,228.18, Shanghai Composite declined 45.08 points or 1.45% to 3,056.61, KOSPI fell 32.13 points or 1.32% to 2,405.73, Jakarta Composite lost 15.89 points or 0.23% to 7,037.26 and Hang Seng decreased 417.09 points or 2.37% to 17,156.49.